What Does Extra contractual Damages Mean?

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What does Extra contractual Damages mean? Read on to discover the definition & meaning of the term Extra contractual Damages - to help you better understand the language used in insurance policies.

Extra contractual Damages

Extra contractual Damages

Damages that are in addition to or outside of a contract of insurance. Extracontractual damages are awarded in "bad faith" claims against insurance companies. They are a form of punitive damages, intended to punish extreme insurer conduct. Extracontractual damage awards most frequently arise from unfair claims handling practices (e.g., unjust denial of coverage, failure to settle a claim within policy limits).

We hope the you have a better understanding of the meaning of Extra contractual Damages.

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